Michael Rosemann, Head of Information Systems School, Queensland University of Technology

The age of digitisation has shifted the focus from cost resilience to revenue resilience. Aiming for efficient operations and high productivity ratios is no longer a guarantee for survival. The emergence of digitally empowered customers has seen the growth of a shared economy and digital public goods putting established revenue streams in danger. Technology-savvy competitors increasingly operate on a light asset model and have entered most industries.

In this context, CFOs have to start building intelligence regarding the current and future threats to their revenue models. Digital developments need to be assessed in terms of their economic implications and CFOs have to contribute to finding new ways to digitalise and monetise existing assets. After decades of building rich tools and methods to secure cost effectiveness, they will now face the challenge of protecting and growing revenue. This will require foresight innovation and entire new methodologies. In particular, CFOs have to contribute to the development of a digital mind in the boardroom so that contemporary ways for revenue resilience can be established quickly.

The capabilities that CFOs need are in fact to be forward-looking. It is too easy to be dominated by the compliance/stewardship role and to always be looking backwards. There is no doubt that digitalisation is changing how customers behave and how that behaviour changes more rapidly than ever before.

The CFO must be leading an organisation now that can take the identification of this market risk and do deep-dive analysis to estimate the financial impact, and to be part of the response to execute a strategy to take the business forward to assure long-term sustainability.

Planning is the extrapolation of the past. Strategy is making your own future. The CFO has a major role in making sure this happens. Companies must be more agile and so does the CFO organisation.

Firstly, identify the “next challenge” for you and your organisation. Unless you are significantly challenged you will stop and/or go backwards. This challenge needs to be loud, excite you and have a strong heartbeat otherwise you will just “fall into” your next year. Once this challenge is clear and compelling it will evoke a process that ensures you look at your current reality with a greater degree of scrutiny. You will ask better questions, examine things in greater detail and demand more from those who are providing feedback.

Secondly, forward thinking CFOs need to understand the role of “small margins”. Top performers’ “rate of improvement” is not normally achieved in big chunks or huge swings of fortune – it is usually achieved with small margins. Understand that these are gold! Your rate of improvement must be better than your competitors’. Standing still won’t cut the mustard. If you are not moving in a competitive environment, you are losing your edge!

Lastly, know the difference between “wait and take”. If you sit back and wait for things to happen, trends to emerge, business to come your way – you will finish second. If you want to be here next year, or better than you were next year, then your mindset must be one of “taking it”. You will not “make it” unless you “take it”.

The CFO Summit is the premium forum bringing elite buyers and sellers together. The Summit offers Australia and New Zealand’s chief financial officers and solution and service providers an intimate environment for a focused discussion of the key new drivers shaping corporate priorities and finance strategies. Taking place at the RACV Royal Pines Resort, Gold Coast, Queensland, Australia, 15 - 17 March 2015, the Summit includes presentations on investing in business intelligence and innovation, leveraging capital management, advancing the CFO leadership and mitigating risks in real time.

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